Collaborative Consumption

Very happy to be with you guys, and I'm just gonna do a really brief intro and an overview and my remix, so to speak, on how I see the collaborative economy as of today and where I think there are some interesting challenge points, some interesting talking points, and where I think there is an amazing opportunity given this rad panel to probe and discover some new insights. So I'm a venture partner at Collaborative Fund. It's a seed fund for creative entrepreneurs who want to change the world. And our thesis and our bet is a mission-driven thesis. It's a mission-driven bet. And it's that the collaborative economy is the way of the future on a very, very high level. And so before I get into that, let me just give a little bit of historical economic background so that we can properly set the stage here. So in 1937, a very famous economist of its time wrote this essay which was a paradigm, you know, a flag in the ground, so to speak, at its time. And this was an essay which talked about the firm. And the firm is a way to aggregate inventory, to centralize distribution channels, to reduce overhead by virtue of doing that aggregation, and therefore meet supply and demand a lot more affordably. It was a game-changing, you know, way of organizing commerce as a result of the Industrial Revolution, and it was proposed by a guy named R.H. Coase, and that's him. Fast forward about 70 years, and that takes you to, if my math is correct, 1995. In 1995, the firm no longer was the way of the future. It was in 1937, but things had changed. And the most important thing that had changed by virtue of this particular presentation is the advent of the internet. And what the internet did was it meant that supply and demand, which previously needed to be aggregated somewhere central, and that distribution for it to be the cheapest possible needed to be done through these really expensive channels, which were paid for by that aggregated inventory, was just peer-to-peer. If I had something and anybody else had something, the cost asymptoted to zero. And that was an absolutely paradigm-shifting new economic model. And so what happened was there were two companies which were created then that were— drew from this insight. The first was called eBay, and we actually have an ex-Ebay guy here on the panel. And the other was called Craigslist. And both of those were simply just a way to find stuff from other people on the internet. And they are two of the most sort of paradigmatically opposed companies you can imagine from a business standpoint. Craigslist was and still is deeply anti-corporate. It's a very small company that's run in a very scrappy way. It hasn't done a lot of product development from a user experience standpoint, user interface standpoint, and it's lasted a long time. And today when you want to go and search for an apartment, when you want to go and meet somebody random, and even when you want to go for a job, you might still use Craigslist. And it did this thing called reach liquidity. Which is an extraordinarily powerful thing in a marketplace. On the very, very opposite end, you have a, by my last math, somewhere between $10 and $50 billion market cap company, might even be greater than that, which was extremely corporate, took on a fair amount of venture money, and had an exit that was, you know, really, really successful for its investors, and the entrepreneurs became extremely wealthy, and it's a big, big, big company. It's called eBay. And eBay is basically just a way to find something that somebody else has and meet the supply and demand with efficiency that had previously never been seen before. It's an amazing, amazing, amazing model, and these two are the pioneers of it. But marketplaces are not easy. If you think about the marketplaces that were created in 1995, eBay and Craigslist are maybe the only two that still come to mind. And a lot of that has to do with the fact that getting to liquidity, which is this process of meeting supply and demand and finding that you can actually have these transactions happen fluidly, is a hard thing. But what they did do is they opened the eyes to a bunch of young entrepreneurs to this incredible world of opportunity which was powered by the peer economy, whereby supply and demand could be met not through the firm, but through these networks, and that you could add a transaction to these networks and you could turn them into marketplaces. So this slide is an example of all these incredible marketplaces that have been built on the different verticals that Craigslist has created categories for. And as you can see, this is not even a comprehensive list,, but there's all sorts of amazing things that happen on Craigslist, and each one of those verticals could be an industry unto itself under certain economic models. Enter collaborative consumption. Now collaborative consumption is one of my favorite investment categories, and so I'm just gonna take you through a little bit of how, how as an investor I think it's so exciting, because that might help contextualize it for you as an entrepreneur or as an investor yourselves. So these are 4 of the major types of things you can invest in if you're investing in internet. There's content, there's products, there's networks, and there's marketplace. Content businesses are tricky. They're hard to grow, they're very hard to defend, and they scale poorly, meaning you have to constantly be creating that new content, and that's an exhausting thing to do. And the New York Times has been creating a lot of content for a very long time. They've done it extremely well, and they've maintained a really high standard, but that's not an easy thing to do, and it's very— definitely not an easy thing to innovate on. The next category, which is somewhat easier from an entrepreneur standpoint, is a product. But it's tricky though, because as you see here, there's a matrix. You can go private at 100 characters, and is that going to be the product that takes off? Or is it 300 characters? Or is it long-form blogging? You can go asynchronous or synchronous. It's just really hard to know. Who would have predicted that an Instagram or Snapchat would have taken off, where an Hipstamatic or another one didn't take off? It's really, really hard to predict. And so those are businesses that are harder for us to bet on. Now networks start to get more interesting because networks are people interacting with each other. And one of the most powerful forces that we have to work with is our connections. And networks take advantage of those connections and they make these really strong communities that result in this thing called network effects where the more we're communicating with each other, the more we want to. And the more we want to, the more we'll do it. And the more we'll do it, the more we'll want to. And that makes them very defensible businesses such that if you can reach network effects, you have a business that's worth investing in, 'cause it's gonna grow really fast on its own. The interesting thing about a marketplace is a marketplace is fundamentally a network. It's a group of people who have some reason to connect. But the thing about a marketplace that makes it different than a network is there's a specific type of connection that is extra on a marketplace, and that's the transaction, and that's when you're passing goods back and forth. And these can be owned goods, these can be shared goods, but it's when you're passing goods back and forth in the context of a network of whatever type, and we'll dig into that just a little bit here. And so trust and reputation is a crucial, crucial component that can take a network and turn it into a marketplace because of this transaction. And so that's why we think, oh my gosh, this collaborative economy, especially as it relates to marketplaces, is deeply powerful from an investment standpoint. Now let's take collaborative consumption from a theoretical standpoint. You guys should actually have this in your flyers, so we'll just walk through them briefly here. But a product-service system is— the best way to describe it is why have a laundry machine in your kitchen and use it once a week when there can be a laundry machine at the laundromat that everybody uses and takes much more advantage of? It's just a more efficient way of meeting supply and demand by sharing. So that's one aspect of the collaborative economy, and a great example of that is Zipcar. Zipcar has a fleet of cars, and these cars, nobody owns them specifically. We all just go use them whenever we need them, and then somebody 'cause somebody else is gonna use it as soon as I'm done with it. That car gets a lot of utility out of it. There's a lot less fallow asset, which is this unused stuff, and we all get access to cars. Great, everybody wins. Another case of, of a collaborative consumption model is the redistribution market. Redistribution markets are when we have these fallow assets in a sort of hard goods sense. So I've got this stuff that I'm not using, so I'm gonna redistribute it. I'm gonna put it into these marketplaces so that you can have some of it too sometimes. And a car-sharing company is a great example of a redistribution market. And then the final one is collaborative lifestyles. And this is where you're sharing stuff that's not a hard asset, but it's more of an intangible good. So maybe you're sharing ideas, maybe you're sharing time, maybe you're sharing, you know, maybe you're sharing the more esoteric stuff. So Skillshare is a pretty good example of this. And by some definitions, Kickstarter is actually a decent example of this, because even though you're transacting on a hard good, so to speak, it's actually the sharing of ideas in this context of the transaction that makes it a really powerful thing. Powerful concept. And so you've got these 3 different categories for collaborative consumption. You think, "All right, well now we have a little bit of a framework for it, but how much is this and what is it actually touching?" And as you can see from this slide, it touches everything, right? And you've got MOOCs and vocational training. I'm sure you've heard of Coursera and of Udemy and of Udacity. And these are taking advantage of the power of these peer-based marketplaces to turn the traditional educational model on its head. And as you can see here, within each one of these categories is just ripe with opportunity for how collaborative consumption and this notion of a peer peer-based economy driven by marketplaces can actually open up all sorts of incredible new forms of transaction, which is really valuable from an entrepreneur's perspective, which is really valuable from an investor's perspective, but powerfully, it's great for a user, because what it does is it creates more supply that's more easily accessible, and that's an incredibly powerful thing for somebody who wants to just get what he needs and get it as soon as he or she wants, right? Now, in terms of the numbers, it's a huge industry. It's an absolutely huge industry, and as you can see here, Each one of those categories, if you think about that, that Craigslist map with all the companies sticking out from it, is over $1 billion of industry where collaborative consumption is just ripe for getting in there and adding efficiency, creating these marketplaces, getting to liquidity, and exploding, right? So it's an incredible opportunity which is not being ignored but shouldn't be ignored by any means. And so it's a really exciting time to be here, and we'll dive a little bit into the why now of it over the course of the panel. But it's not easy, you know, there's some challenges. The regulators, the journalists, the economists have taken notice. And it's been a very colorful week for the collaborative economy and for collaborative consumption. But in the past year, the California Public Utilities Commission issued a cease and desist on the ridesharing companies, so Sidecar, Uber, and Lyft, and they gave them a pretty hefty fine for it. And just this past week and a half or so, regulators have been butting heads with some of the collaborative businesses that you may have heard of, which we'll talk a little bit about. And professors also speculate, and this is a really interesting point too, about the fact that once we're all sharing, and once these companies start to turn into these peer models, then what happens to health insurance? If that's not— if that's employer-driven, or is it on my own, or how do we figure that out? You know, these models start to make me wonder about the sort of social safety net, which is generally tied to traditional employment.? And if these traditional employers are being disrupted by this collaborative economy, then where does that stuff come from? And then finally, the New York Times has asked if it's, you know, a race to the bottom, and by which they mean, if we're creating so much efficiency, is efficiency a good thing? Because the minimum wage is a fundamentally inefficient idea, right? So is efficiency actually a good thing? And is the collaborative economy creating efficiency something we should be wary of as well as be excited about? And so We have a communication challenge that we have to overcome as a community if we want to see this thing come to the fore. But it's, again, a very exciting opportunity. And as I said in describing the difference between a network and a collaborative marketplace, the trust and the reputation are absolutely critical because you're sharing stuff that's important— that's yours on some level. And we may even be redefining the notion of ownership. And Mary Meeker, the partner at Kleiner Perkins and a former Morgan Stanley analyst, calls it the asset-light generation, by which it means A young person today is more interested in a life with free and fast Wi-Fi than owning a car. And that's a survey where the vast majority of young people just prefer that because we want access, we don't want ownership. And that's a paradigm that's emerging and it's getting— starting to take hold in a way that's really powerful. And so what's happening is that requires trust and reputation to catch up with it too because we are still transacting on hard goods in many cases and on expensive Lots of things that we have to figure out, well, you know, who owns this and how do they own it and how do we manifest that? So these tools are gonna continue to emerge and it's really exciting. And again, not all unit economics on these marketplaces are the same. I don't know if you can share everything, you know, you certainly can't share my watch, right? And so what can you share, what can't you share, and why? These are things that we sort of have to think about as a community, as a culture, from a cultural standpoint and from an economic standpoint. And then finally, the collaborative economy does shrink the world. It's a really, really cool thing because, you know, it creates this bartering system which reminds you of the pre-industrial era where you're just sharing goods. I'll give you a little bit of this if you give me a little bit of that. It's built on networks which are fundamentally small and/or, you know, aligned groups of people. And that's really, really exciting too. And this is a model that's very fresh, it's very new, and it's growing in a hurry. And so I'm so excited to be able to talk a little bit more about it with these brilliant, brilliant guys here. And in the context of doing that, thank you for me, and I would just like to introduce Andre Haddad, who is the CEO of RelayRides, which is one of the world's leading car-sharing companies right now. Really, really, really exciting company, and he's going to speak a little bit more about the company.

Thanks for this great overview. I think it's a great background for us to continue the conversation tonight. I'm very excited to be here. It's really fun to see some familiar faces, some former colleagues from eBay and Shopping.com, so thanks for those of you who joined. I thought I'd give you a little bit of an overview of what peer-to-peer car sharing is. I'm— this audience is, I'm sure, very educated about, you know, the collaborative consumption economy, and I thought I'd give you a few my personal thoughts of of what's going on in this space. But first, just a couple of minutes on my background. I've been in the marketplace business for the last 15 years. I initially founded a company in Europe back in the late 1990s. We were among the first e-commerce marketplace businesses in Europe. We sold the company to eBay. I then moved to California in 2002, spent many years at eBay where I had the opportunity to grow that business and become this You know, today, $75 billion market cap company. We have developed many interesting products, and, you know, frankly, even then, I didn't imagine that the marketplace model could scale to so many verticals. And that slide that looked at every Craigslist category, it's a very— it's a very good slide because there's at least a billion-dollar company being built on each one of those categories, I think, as we speak. Those are really big sectors of the economy. So I joined RelayRides a couple years ago, and it's been quite an adventure over the last 2 years. You know, building companies is hard enough when it's just a company to build, and as you'll see in this presentation and the conversation later tonight, when you're building a business that is a marketplace business, there are some unique challenges with building marketplaces. Challenges that I personally enjoy and I, you know, fight every day. But we also have some unique challenges because we're disrupting some really big established industries. You know, disrupting transportation, which is a trillion-plus dollar industry and has a lot of history and a lot of practices, a lot of important players, a lot of really interesting regulation. Across every state, every municipality, I think, you know, it exposes us to bringing innovation in places where there hasn't been a lot of innovation for the last decades. And so it's a fun, exciting adventure to build a company, and it's doubly, triply, quadruply more fun to disrupt existing frameworks. So let me start with what our vision is. We want to build the world's largest peer-to-peer car-sharing marketplace. And when you're thinking about a marketplace, as CEO of the company, I constantly think of 4 key things, and these are core to our value proposition to our customers. One is to have the largest network. You know, we talk about networks. The added value of the marketplace is when there's actually people using it, when there's inventory in the marketplace. It's not about the software. You know, it's sometimes hard for our for our engineering team to, to think about what their impact is and what the rest of the team's impact is. But it's not just about software. The, the product isn't the software. The product is the software plus many, many, many layers on top of the software. And so the first layer is having inventory. And we are in a phase of our company where we're continuing to focus on inventory acquisition. We're, in fact, continue to be supply constrained. Um, and so we focus a lot on building that inventory, and we try to have really comprehensive geographic coverage. So this business is interesting. Unlike eBay, where there's shipping involved, where somebody can ship an item from Hong Kong to somebody in San Francisco, here the owner and the renter have to connect. They have to connect in person. We can intermediate that connection through technology, but ultimately the car is going to connect the two parties, and so the local aspect of this business is really important. Different, and we can't have somebody in New York transact with somebody in San Francisco. They have to be at some point near the car, where the car is, whether it's in San Francisco or New York. The other big part of running this business and building it is really leveraging some of the core, core advantages of a marketplace model. You know, one of the core advantages of a marketplace model is its unique selection. It's been the core advantage of eBay for many years. It's the advantage of marketplace like Airbnb where you can access properties that you wouldn't find traditionally in hotels. It's the marketplace— it's the advantage of a marketplace like RelayRides where when you— if you browse through our website, you'll see a lot of cars, a lot of brands that you wouldn't even find in traditional car sharing, car rental. Fleets. You know, our second most popular brand is BMW, for example, and, you know, BMW is not really easily findable at Hertz or Avis. We have a lot of stick shift cars, so if somebody wants to drive stick shift, which, you know, I do, you know, you can't really find stick shift cars in traditional car rental. So the unique selection of vehicles, the fact that you can, you know, find anything from the Smart Car to the F-350, is a big advantage for us. But then finally, you know, in terms of the positive value proposition, you know, probably the most important value prop for both the owner and the renter is the economic value that we create. And we see it time and time again as the main motivator for people to change their behaviors and join RelayRides and start using us. So on the owner side, it's the ability to make money with their car.. And as you know, cars are a terrible asset to own. As soon as you get out of the lot, you know, you lose 25% to 50% of the value of your car. It's an asset that depreciates primarily driven by time, not mileage, by the way. A lot of people are confused on that topic. And it's an asset that is not really used that frequently. According to a lot of the research that's been done on this topic, cars stay idle 92% of the time. —so it's an asset that costs you money, it's an asset that you're not using very frequently, yet we have this culture where we have 250 million cars in the US alone, a billion worldwide, and that number is increasing by 25 million net every year. So it just doesn't make a lot of sense economically. And so what we're bringing here is the opportunity for owners to make money with their cars and actually compensate the cost of car ownership. And for renters, because we don't have a, you know, a firm, we're not a firm, so we don't aggregate and concentrate and build all that infrastructure, we can actually enable that direct connectivity between the owner and the renter at a fraction of the cost structure of a traditional firm. And so renters end up benefiting from that with, you know, through prices that are 20 to 50% cheaper than traditional car rental. Traditional car sharing. So those are the 3 key things that people value. It's the convenience of something close by, hence the largest network that we need to build, the unique selection, and then finally the value that we deliver. And I would propose that those are the universal values of a marketplace for renters, for owners, and and in general for sort of the supply side and demand side. And marketplaces that win deliver great value, unique selection, and better convenience than what's available out there. And last but not least, you know, marketplace businesses are unique because we're connecting people and we don't really control the experience end-to-end. So we don't really know what's gonna happen when somebody connects, and what we can do is influence people's behaviors and make sure that everything goes well, but we can't really control it. And so I, you know, I spent 10 years at eBay working in the product team, in particular on the trust and safety aspects. And, you know, eBay, it's a very large team that focuses on trust and safety. We have that already in our small team of 30 people at RelayRides because trust and safety is really critical for a marketplace like RelayRides in particular. And in our case specifically, we do things like driver screening. So I don't know if you all knew, but once you give us your driver's license, I can access your driving history. So I can know, because it's public information, I can know whether you've had any major violations in your driving records. And, you know, I can know if you have any minor violations, and then we can decide whether, you know, you meet our criteria or not. So we have very high eligibility criteria to make sure we have really great drivers that can sign up and use our website. But we also do a lot of the traditional trust and safety that a marketplace does, like reputation and feedback and, you know, and payments and all of that stuff. So that's a big part of running a marketplace and obviously a big deal for RelayRides because the transaction on RelayRides is an average of $150 for a reservation. But the potential loss is $20,000 for the car, and then potential liability— talk about liability, and we'll talk about insurance in a minute, I'm sure— we, you know, we need to do a particularly good job at creating a safe and trusted marketplace. So I mentioned this, I'm gonna skip briefly because I know I have only 10 minutes, but the, you know, the key markets that we're disrupting, we're starting with you know, car sharing and then car rental. Car rental is a $30 billion industry in the US alone, $60 billion worldwide. But our vision is not to stop there. Our vision is to build a marketplace that is so liquid that in cities like San Francisco you could have cars in every street corner. And we believe that if we can enable people to access cars and access mobility just when they need it,— they will fundamentally rethink owning vehicles and owning a first car, owning a second car. So our vision is really to disrupt the car ownership market, which is an even bigger market. By the way, Zipcar has charted that course. You know, that's been really the essence of Zipcar as a company. Because our business model is different and we don't have to own the cars ourselves and don't have to manage them, we may be able to actually help reach that vision faster maybe than even Zipcar has been able to do. The economics are pretty compelling. You know, the owners I mentioned expect to make money by renting their car on RelayRides, and they're currently making around $250 a month. That's actually the cost, the average cost of maintaining a car when you think about the insurance cost, parking, And what's interesting is that's for a 7 to 8 day rental a month. So you, you know, effectively keep your car 3/4 of the time. You can use it 3/4 of the time. You share it 1/4 of the time and you recover the cost of your car, which is a pretty powerful value proposition. And then we're seeing some people who have a second or third car who don't really don't need them at all. They're putting their car, you know, almost all the time and they're making, you know, sometimes more than $1,000. And, you know, because marketplace business is really magical, you see the entrepreneurial nature of your users. We're starting to see some micro fleet managers show up, and these guys are making, you know, there's a guy who's making $60,000 a year on RelayRides with his 4 cars, which is, you know, I don't know where that's gonna go, but it's fun. We might have, you know, we're talking with, you know, dealers who want to put their cars on RelayRides, You know, at eBay, this was an interesting phenomenon. As you know, eBay started as a peer-to-peer, or at that time it was not called peer-to-peer, it was called consumer-to-consumer. Peer-to-peer is the new, more fashionable way to say consumer-to-consumer. But it really became, you know, power sellers started emerging, and now we've got really large enterprises selling on eBay. We may see the same phenomenon happening on RelayRides over time. And as you can see, Leonard, Ashley, and Shannon Some of our most active owners have made in 12 months the equivalent of the Kelley Blue Book value of their vehicle, which is a lot of fun. On the renter side, you know, the value prop is really pretty traditional, you know, better value. So first, if you want to make people change their behavior, you've got to offer them a core economic benefit. It can't be just because of the mission of the company. It can't be just because were better for the environment. It can't be just because I wanna, you know, put money in my neighbor's pocket rather than some big corporation. Those are all great benefits, emotional benefits, but if you think of the sort of Maslow hierarchy of needs, it starts with real economic benefits. And that economic benefit is people can get a car for, you know, 20 to 40% cheaper than traditional car rental or car sharing. And that moves people. People change their e-commerce habits for 5% difference. That was my, you know, our learnings from watching users and looking at data in the e-commerce space. It's a little bit more, people need a little bit more incentive to change behavior on things that are a little bit more, less commoditized, but with 20 to 40%, it's a sufficiently big advantage that we're seeing people change their behavior. Because of that. And then selection, you know, we look— this is a snapshot of some of the cars, you know, I guarantee you won't find any of these cars in traditional car-sharing fleets. Our average vehicle is, by the way, 4 to 5 years old because our owners have figured out that this is where, you know, the vast majority of the depreciation has happened. And so it makes even more sense if you own a 4 to 5-year-old car to to put it on ReaderRides because the price, the rental price does not depreciate that much, whereas your actual cost of having that car has depreciated significantly. And so we see a lot of cars, including, you know, some really cool cars. Like, wouldn't you want to drive some of those cars, right? Yeah, I would. Actually, the Volt is my car, so if you'd like, I can rent it to you. I also rent my Carrera. Which is not in San Francisco, it's in Hillsborough where I live, and I'd be happy to rent it to you. It's a steal of $160 a day, so it's an amazing value. And then, you know, the model and the idea that we can offer mobility really everywhere and that, you know, we don't have to have RelayRides just in the most urban of areas and most dense of areas has been, you know, astounding to me. We launched nationwide in March of last year. Last year. So it's been a little bit over a month— a little bit over a year, sorry. And in just 12 months, we've expanded our coverage from our test markets in San Francisco and Boston to 1,500 cities in 50 states. And, you know, I frankly wouldn't have believed that this could happen. But, you know, we've subscribed to the theory of instead of expanding city by city, which a lot of our, you know, some of transportation startups are doing. We just created the platform and made it available everywhere. And we realized that this was not going to create a lot of efficiency. There's gonna be some places where there's gonna be a lot of demand but no cars, and some places are gonna be lots of cars and no demand. But, you know, the first stage of a marketplace business is really messy, and you need to embrace that messiness. And if you think you can control the marketplace business, market business, marketplace business, you shouldn't be in the marketplace business. You should do something else. So it's a little bit messy, but it's magical because people make this happen. You know, I would not have predicted we'd be in 1,500 cities just 12 months later. So that's a little bit of an overview of where we are. You know, we have high ambitions for this company. We also feel that Because of, you know, we're disrupting this big space which is transportation, we're also held as a great example for many companies that are disrupting, you know, many industries within the collaborative consumption model. So, you know, I'm really proud to be both the CEO of the company and a small spokesperson for the industry at large, and I'm really happy to, you know, answer any questions later on today. Especially the tough ones. Thank you.

Thank you, Andre. We got an amazing panel here, and this panel represents a cross-section of industries, a cross-section of job functions, job titles, and then also viewpoints around collaborative consumption and the sharing economy. And I'm so grateful to be on on the stage with them because they've already done way more than I could ever hope to do in pushing this industry forward from their respective categories. And so what I'd like to do is just run through a very quick high-level intro from each one of them, and then if you guys would be willing to share a little bit about who you are and how your work touches collaborative consumption, or if it is collaborative consumption, that would be awesome. Then we'll jump right into the meat. So we got Peter Damster, whose formal title is Advanced Technologies Engineer at BMW, but he does— all sorts of stuff for BMW, including car sharing and electric BMWs and everything in between. And so I'm so excited to hear what he has to say. We've got Andy Rubin, who's the co-founder of Yertle, which is a sharing tool which, in their words, helps you give and get the things you need with your friends. And it's an awesome new sharing marketplace, and he's got an extraordinary experience working in sustainability for big companies, for small companies. And we got Ronnie Conway, who's a partner at Andreessen Horowitz, which is a small venture capital firm— for the laughs— based in Menlo Park. And they've invested in all sorts of things, but for our purposes, most notably Airbnb. And so if you guys can just describe a little bit about why and how you touch collaborative consumption, then we'll jump right into it.

Ronnie? Yeah, so I think that collaborative consumption right now has a tremendous opportunity. So there's a few A few things pushing that, one being the web and mobile phones has created this open platform for developers to build on, and then Facebook has given us this next layer of identity. And then third is the financial benefits of it. So being investors in Airbnb, we hear these amazing stories all the time about people get to stay in their homes, you know, they Airbnb their homes for one week a month, and then based on that one week,, it allows them to pay their mortgage. So there's all of these amazing financial aspects of these models. So I think it's those 3 factors that are really like fueling a cultural shift that's moving from ownership to the sharing economy. And that cultural shift is creating like an amazing opportunity for us to invest in.

Cool. Good. Hello. Good evening. Yeah, I agree with— obviously I agree. I'm in this space. The peer-to-peer space, though, is— the peer-to-peer space, just from my— so I've been in this space with Yertle. So I'm a co-founder and CEO of Yertle, which is a place where you share things, give and get things with your friends. And I've been in this space now for a little over a year. And a year into this, I am more convinced than ever that the peer-to-peer market, what Andre just talked about, the overview is, we are seeing the very beginning of something much larger than I think it's evident to, certainly to me and to many of us here, at how big this will be. And my background for saying that, I spent, before starting Yertle, I spent the previous majority of my career, the last 15 years, at companies 15 years at Walmart. And so I've been in kind of the driver's seat from running global strategy for a company like that, started sustainability, and have seen this model of kind of top-down, we manufacture things, we move them through distribution centers, we put them on shelves, people come in and buy them, we manage the inventory. And I'm seeing this shift in what we're doing with Yurtle right now. That when you think about our closets and garages, that combined closet and garage space in US homes dwarfs the Amazon and Walmart space in warehouses. And it is, you know, when you think about it in that way, and we think about, as you mentioned, redistribution— just one of the stats that I'll end with here, and then we'll continue in questions— there are now 62 Lego bricks for every man, woman, and child on the planet. It's staggering the amount of things we have, and that, you know, we see that as a massive opportunity for this new economy.

That sounds like too much Lego.

We actually—

never too much Lego. Yeah, I think it's never too much Lego.

It's the opportunity for the bricks that are sitting in a closet and garage, unplayed with, unused, for a child to have the world's largest Lego set. Hear, hear. Right. Now we're talking. I think that's the opportunity.

Please, Peter. So I'm the suit guy. The incumbent in the suit. I never thought I'd be the suit guy. But so I'm Pete Dempster, and I work in research and technology for BMW Group.. And the way my work touches the space of collaborative consumption is that we have an exciting car-sharing program that is just kicking off in San Francisco with 70 of our all-electric 1 Series. It's called the Active-e. The Active-e is powered by renewable energy. It's one of the products that we created out of our office.. And it's sort of an energy market product, which is pretty interesting, and that's for a future discussion. But, you know, when we talk about disruption in transportation and mobility, can you think of anything more disruptive than, you know, a renewable energy-powered electric vehicle that is shared by 9 people? That's pretty amazing. So we're very excited about that. And looking to grow in San Francisco and other markets in the US. But in addition, we've made some big investments in ChargePoint, which is an EV charger network that we think is on the right track, in Embark, which is a really exciting product that gives you some slick transit maps and plans your trip using public transit and aggregates multiple transit types and modes. So that's a great product. And also peer-to-peer parking sharing. We've invested in Park in My House, which is a pretty interesting idea. We have a lot of driveways out there. And you can make some money on your driveway, especially if you live in a big city. So we think that, you know, it's not just the mobility solution, it's not just the parking, it's combining all of these things and coming up with innovative products and services to connect people to them. That is going to be a really important thing for us as a company in the future. So when I'm not in a suit, though I was a member of Zipcar for a number of years when it first started. I was— am a RelayRides member currently. And occasionally in San Francisco, you'll see me driving around in a car with a pink mustache on it. So in addition to working in this space, I'm a huge fan and a customer and a user. Cool.

Great group. First question, just so that we can all be on the same page here, and maybe we won't be able to, what are we talking about exactly? Is collaborative consumption just sharing? Is Etsy collaborative consumption? Andre, you worked at eBay. You weren't sharing much there. What is collaborative consumption exactly? Maybe you can start with your perspective.

Sure. The way I think about it is collaborative consumption is one of the use cases of a marketplace business. And I think that marketplace businesses are— the essence of marketplace business is really connecting people around some transaction. So it's really perhaps— it doesn't need to be an asset sharing as a transaction. It can be any kind of transaction. Kind of transaction. So I'm a host on Airbnb. We moved from France 10 years ago, and I just couldn't sell our property in Paris, and we go back every year. But that's a very inefficient way to own property in some other place, right? So we rent our home in Paris 11 months of the year, and we just use it 1 month of the year. I'm a lender on lending LendingClub.com. It's another interesting model where we connect people, borrowers and lenders, you know, and it's around a transaction that has nothing to do with asset sharing, but it's a marketplace type of model. So I think of the asset sharing ones as just one of the— one important, but one of the verticals in the marketplace model.

That sounds— it's interesting. It sounds like connectivity aspect of it is part of the power of the model.

Yeah, I do think that a fundamental aspect of a marketplace is really connecting to people. And that's really the defining aspect of these models, I think.

And Andy, is that where you think the power lies too? Because with Yertle, you share everything, but you share it with friends. So can you say a little more about that?

Yeah, I agree with that overall. I mean, I agree with that definition. Definition. I think the— one of the things that we deal with uniquely when we talk about items that are not cars or that are not houses or apartments is the value of the item. And so when we're dealing with an item that has a value of $2,000, $3,000, $6,000, as a wanter of that item or a user, you'll do additional research for a vacation rental, an Airbnb rental. As someone who's gonna post, you'll do additional work as well. When we're talking about items that have an average value between $25 and $50, you have to figure out— we believe the key is to figuring out what the motivation is, right, to make these type of connections in the definition that I agree with about the matching. And the motivation that we found to be incredibly strong is the social motivation. Which is an experience that has existed for years, and I have yet to meet the person who hasn't had at least one experience where you've got a friend that comes over, you've got something you're done with, and you say, "Yeah, my son's gonna take keyboard lessons," and they say, "Oh, I'm done with that keyboard. Do you want to use it?" And that experience right now is limited to the occurrence of having that friend come by at that moment or be at that party and have a have a conversation. And the opportunity of the amount of things we have is much larger. And so as technology is one of the enabling factors, mobile and the ability of notifications, loca— you know, location, those bring the transaction costs down. And then the social motivation of being able to hand somebody something, someone that you care about, is fairly significant and dwarfs then a lower cost or low item value of a $50 item as opposed to a $4,000 item.

So you touched a little bit on the timing of it as it relates to technology and as it relates to the mobile device. And I know that Andreesen is very thoughtful about the services aspect of the collaborative economy. What does that services aspect mean? What is the technology that's actually driving this?

Yeah, it's, it's actually really interesting. We're just seeing a bunch of these companies now that aren't necessarily geared around collaborative consumption but makes collaborative consumption much easier. So one of them is a company called Lockitron. And what this does is basically it allows you to just put your iPhone up to a lock that is synced up with your phone and it unlocks it. So one of the key pain points of Airbnb is key swapping. So that allows allows for that to go away. Another one is an interesting one called Homejoy. And Homejoy just is a simple app on your phone and it allows you to, like, within 2 taps, have someone come over and clean your house for a very cheap— a cheap price and it's just very, very easy to do. So I think, like, those are 2 companies where you're seeing, like, these sort of, like, these ancillary economies come up from this. And then there's also more generally I think that— Andre, I'm sure you have a bunch of thoughts on this— the insurance aspects of these new businesses can be just phenomenal. Once you have more transparency around identity and more transparency around people's information, such as how they treated their last 3 Airbnbs or how they drove their last few Relay rides, you can much more efficiently price Price Insurance, and like you could see a world where you can get insurance down to like pricing in real time, right? So like right after you get out of your car, it's like, okay, here's your insurance bill based on the way you drove, or here's your insurance bill for your Airbnb based on the way you treated your Airbnb. So there's a ton of other ancillary business models involved with all this as well.

That sounds like the type of stuff that you guys are looking for too with your investment strategy. And can you just walk through a few of the interesting examples there with the service layer around the collaborative consumption?

Yeah, so I mean, of course, yeah, we're looking at parking. That's really important. We have ParkNow. We're trying to create a marketplace basically from nothing. And essentially provide drivers with a market for parking. But in addition, we're adding services to that parking as well. So they can compare between garages when they're coming into a city, go to the cheapest one, and then once they're in there, we have an opportunity to add on a car wash or there are other services or other things that you could— an oil change or something like that. And so, you know, and mobile and the integration of mobile in the car is really enabling that.

So the part about this I'm trying to understand is it seems like there's competing motivations here. On the one hand, there's this philosophical and/or cultural shift towards sharing and/or access versus ownership. But then on the other hand, there's just the pure economic motivation. Do those things ever come in conflict with each other, and is one of them really the main driver here? Because I'm sensing a little bit of both, and I'm trying to understand which one's the real driver of this trend.

So, I mean, I do think that they are coming together and they're not at odds with one another, at least in the car-sharing space. You know, when you step back and you think about the, you know, of the economy from a macro standpoint. You know, the last 30 years, you know, real household income has been pretty much flat in the U.S. And, you know, we didn't really sort of understand that because we had, you know, interest rates that went down in the '80s and so everybody felt rich and then we had the bubble in the '90s and then another bubble. And I think after the last bubble burst and we realized, you know, what's our real— as a society, what's our real income level? And where we can really consume and where we've got to really rethink our consumption model. I think that that has a significant impact on the economics of the consumer economy. That's a structural trend that I personally believe is really driving the sharing economy at really fast speed. The other one is, I think, the— more of the behavioral change I think you alluded to in the beginning. Certainly when it comes to cars, we have a really nice partnership with General Motors. And frankly, when I joined the company, the team was telling me, we're going to sign this deal with General Motors. And I'm like, really? How is that possible? How can General Motors be interested in relay rides? And I was quite skeptical. And I made a bet with the team. And I was actually delighted to have lost that bet, because we ended up signing a deal. And long story short— and Peter has a lot of experience, and he will be much more eloquent than I can be on this specific— the in-car technology is amazing with what's happening with BMW now and what happened with with the OnStar technology at GM, you know, they— you know, people can actually unlock my— people can unlock my Volt without ever seeing me. They could just use their mobile phone through either text messaging or our app. If they have a reservation on my Volt, you know, they can just go to the Volt and just unlock it, and I'm not even present. So it's sort of magical. And that's going to happen more and more, I think, across many more cars. But the reason why GM was interested wasn't because they liked the cool, you know, we can unlock the car for a renter. It's because, you know, they also— they fundamentally believe that consumers, young consumers, are thinking completely differently about cars these days. You know, one staggering stat that I actually didn't even know about that I learned as part of those conversations, that partnership with General Motors, is only 15% 15 years ago, the average age to get a driver's license in the U.S. was 16. Today, it's 19. In 15 years, we went from 16 to 19. Wow. I don't know if you realize this, but this is a massive change in such a short amount of time. 15 years ago, car brands monopolized the top 20 most coveted brands amongst, you know, 18 to 30-year-olds. Today, there isn't a single car brand in the top 10. And, you know, the brands that young people are excited about are, you'd expect, you know, it's mobile phones and technology. And the reason is, you know, the socialization now is happening through these devices, and it's no longer happening because people are getting their driver's license, you know, getting in their car and going out and, you know, going to the diners with their friends. So It's sort of a trend that's happening on the younger generation that I think is very additive to the economic situation that we as a society just have to wake up to.

Kanyi Maqubela: Andy, can you— so Andy was Chief Sustainability Officer at Walmart. He was being modest. And it's a fascinating lens through which to see the world. And I'm wondering if you can describe a little bit more about you personally or in your experience with Walmart whether or not that sustainability is part of the additive nature of it, whether that's the core of it and the economic aspect is additive.

How do you see that playing out? Yeah, so after— so in sustainability, I mean, there's massive good that is done, I believe, from companies like Walmart, large companies that take on those type of efforts. But one of the pivotal moments for me was after sustainability when I was working in private brands. And if you've ever seen the plastic plastic forks that have the handles cut out? That was something that I was involved in with Diamond, and we basically removed 16% of the resin, of the plastic from the handle. And we were all excited, and I was like, "Wow, look at this design improvement, so obvious," right? It was 11% of the cost, and then you start realizing how many plastic forks we use. And the math, and when you add the thing up, you're like, pat ourselves on the back, but it's just the math doesn't work. And so there is need— we're better off with 16% less resin because honestly we will likely use the plastic forks anyway. And there is massive scale in those type of changes. And at the same time, we are living in kind of in this— as we're talking about this topic, this is a time with transaction cost and peer-to-peer markets that we can question the need for for some of the things. You know, a great example is apparel. We can make a jacket a little bit better. But there were 80 billion new apparel garments manufactured last year. 80 billion. So that's 11 garments for everyone on the planet. There are better ways to do this where a Patagonia jacket that is sitting in our closet because my kids have outgrown it wants to be used, it wants to go camping, and we would love to pass that along. And so both. We should keep working on better forks and better jackets. And we also are in a time where we can move sustainability and economics and community and resourcing through these new models that are kind of right there.

And they're actually happening. Now, can we move companies through that? Peter, BMW's business is to sell. Cars, I would imagine. And the more cars that it sells, the better the business is. And so— I agree. How is that going to fit? So how do you fit? What are you going to do? It seems like there's a big disconnect here you're going to have to figure out. Can you speak about that a little?

Well, yeah. And just to backpedal a little bit, it's hard to reconcile that— that young people aren't gonna be buying cars in 2050 with the numbers, the sales numbers that we're seeing. We're exceeding our sales targets every year and we sell almost 2 million cars each year. And these are glorious, big, beautiful cars with 8-cylinder twin turbo engines and they really are remarkable. Pieces of— they're remarkable machines, like, and everyone here should drive one.

Borrowed or new?

Yeah, sure. But, you know, actually it's funny, I just met someone from Shell Energy, and he's in charge of the Shell Outlook to 2050 today, and he said, yeah, we're seeing that 1 million people are moving to cities every week for the next 40 years. And you can imagine what happens when those people bring 1.1 cars per household to that city. It's just completely unsustainable. And there's absolutely no way that it's going to happen for a tremendous amount of reasons. It's going to be too costly for society, for air quality, for water, for for fossil fuel use, for so many reasons. But then on top of that, we have exciting mobile tech, and it's actually the case that using mobility services are more convenient, more flexible, and more affordable for people. So I think that's one of the main drivers here.. And so we're hoping that we can take advantage of the learning right now. We've invested over €3 million, that was just said by our CEO, in BMWi, which is not a car sub-brand, it is a mobility sub-brand. So it's a tremendous amount of investment. And why are we doing this? Because we honestly honestly believe, it's not to get ZEV credits or something, it's that we honestly believe that's the future. That we have to act soon and learn about car sharing, about parking, about mobility services, or we'll be out of the business in 2050. Wow.

It's a massively, it's such a massively disruptive change. That it would seem that if history is any judge, the companies will either get this and they will figure out ways to adopt the models, right, to better serve the users that they have, or they won't, and they won't get that opportunity. They'll be gone.

So along those lines, here's a question for Ronnie. So my understanding of the stat that stuck in my head was that there has been at least one day where there were more Airbnb rooms booked than Hilton rooms booked. And that's huge. And if I'm Hilton, the BMW equivalent would be, well, gosh, we got to think about some aspect of sharing, some aspect of mobility or whatever right away. But at the same time, I think it was yesterday, a judge in New York City declared Airbnb illegal. So what are the hurdles that we're facing right here with this economy? Because it seems like it's growing, but it also seems It sounds like the challenges are profound and they're immediate.

Right, so I got a call this morning on my way to work from a friend of mine who is very untechnical and says, "You'll never believe it, they just banned all of Airbnb in New York City right now." And I'm like, "Oh great, I'm going on a collaborative consumption panel tonight to talk about this." Great timing.

I've had some time to think about this.

The easy answer for me is I'm not sure what's going on in each particular municipality for Airbnb, but there are a bunch of examples now of municipalities that are really embracing collaborative consumption. One of them being Washington, D.C., and I'm not sure how many of you are familiar with what's going on there, but the mayor there, Adrian Fenty, who is a special partner at Andreessen Horowitz, instituted a bike-sharing program So now there are literally like hundreds of bike sharing stops around all of Washington, D.C. where for, I think it's like $3 a day, and then if you want an annual pass, it's $80. You can pick up a bike, ride it wherever you need it, and it's been tremendously successful. Thousands of riders, thousands of bikes. I think that over time, municipalities and government will really get, will start to really understand this stuff. And again, it's for all the reasons that we've mentioned. The cultural shifts, the economic shifts, they're just so large that sooner or later, all of these different parties are going to get together because their constituents are going to, They're going to just need them to. And these problems will get solved in some way. But I think, like I said, I point to the bike-sharing program and there's a few others where there's like baby steps for this stuff and then I think it will continue to rise from there.

Now, my understanding of the ruling in New York is that it was just a simple matter of the laws as construed by the judge not matching up with the way that they were being followed. And with Sidecar and Uber and Lyft in California, there have been similar challenges. But it seems like there are other friction points with regulators. And I think it was last week where there was a disagreement between RelayRides and another aspect of the— of the New York regulatory body over insurance. And so it seems like it's a minefield in terms of the varying sets of offerings and challenges that we have to prepare for and communicating each one of value props to each one of the regulators in each municipality. Can you, can you say a little bit more about, about your experience, whatever you're able to say within the sort of confines of legality?

Sure, so just to give some context, earlier last week we got a cease and desist from New York's Department of Financial Services, which is the regulator that in New York State regulates financial services and insurance, and the The reason is that this regulator believes that our insurance product that we offer as part of the Readerize marketplace does not comply with aspects of New York's insurance laws. And, you know, I've learned a ton about insurance for the last couple of years, by the way. It's a really interesting topic, to say the least. First of all, there is no one insurance market. Market in the US. There are 50 markets. Okay? There's 50 states, and each state has its own regulatory authority, interprets things the way they want. They have different rules, different regulations, different unique characteristics. And so it's, you know, it's challenging for a technology company like us to disrupt the space and gain that critical mass by trying to, you know, understand all of the different details of every single, you know, insurance regulators across every single state. So we've worked with the best people in the industry. We've worked with the best insurance companies in the industry, with the best brokers in the industry, with the best counsels in the industry, and put together a really innovative insurance product that we actually created. This product did not exist before RelayRides. And the product works as follows. When you're an owner and you list your vehicle on RelayRides, your personal policy no longer is primary. The RelayRides policy becomes primary. And we insure every owner for liability up to $1 million, and we insure them for all and any physical damage that happens to their vehicle. And we do that for the duration of their reservation, their rental. So it's an incredibly innovative insurance product. There was nothing like this before. And of course we insure the renter. The renter has different options. They can select different levels of insurance and they pay different levels of premiums. And we thought this This is just an amazing answer for this use case, and the insurance industry could not believe that we innovate. Can you imagine? We innovate, we have nothing to do with insurance. Nothing. You know, we're a technology company. You know, half of my team is engineers, software engineers. And we've, with the support of some, you know, great thinkers and innovators in the space and and insurance partners, we put together this amazing new product, and the insurance industry, you know, is not used to that kind of innovation, right? They, you know, it's a very traditional industry where there's a lot of, you know, classic kind of policies that they'd sell for individuals, car policies, you know, driving policies. And we find that we have to constantly be in this mode of evangelizing what we're doing because, you know, it's so new that the first instinct that people have is, "Well, this can't work." Actually, no, it does. It works perfectly. You know, we've had hundreds of thousands of transactions by now on RelayRides and every one of them— well, there's of course been claims, there's accidents, you know, even the best drivers have accidents. But in every single one of those claims, everything went really well and was executed exactly as planned by this insurance product that we built. Yet, you know, we continue to get these skeptical comments and— but, you know, we feel that our duty as we innovate is to continue to evangelize and continue to continue to prove that, you know, we have actually the best insurance protection for our customers in our marketplace, that it's a product that is particularly adapted to what we're doing, which is peer-to-peer car rental. And, you know, we believe that it's important for us to protect people. You know, it's important for people to have protection in a, you know, when they're driving cars, and we're not going to let people people just use their personal policies while, you know, using RelayRides. So we think it's a big part of our value proposition, and we're, you know, we're going to go through the, you know, the process to get ourselves, make ourselves heard with the regulators.

Good luck. I'm confident you'll do it. In the context of protecting people, Ronnie made a passing mention to to the social web as being an incredible catalyst for the advent of the collaborative economy because we all know who each other are and we all know who we all know in common and that lowers the barrier for us to be able to transact. And that's actually exactly how your model is built right now, my understanding is. And do you think that's the necessary model for collaborative consumption moving forward or do you think that 'cause it sort of stands in tension with the internet, 'cause the internet is this sort of far-flung, random people who you don't know anything about experience. And so if this is gonna get to scale, are we gonna have to add identity to the whole internet, or the opposite, right?

Yeah. So I'll just comment on my experience with Yertle. By the way, I'm pro-internet. Open. For the way that we've built Yertle and what we're finding is the motivation for getting and giving things, real identity matters a lot. And it's a discussion that we have quite a bit in terms of real identity and actually how we get to know people that we might transact with. And as something that— well, I could think of half a dozen things that I've given and gotten, but the identity of those people really matters. And at this point, we are— the whole model is built— the way Yertle works is you log on, it's a Facebook Connect app, so you log on through Facebook. So you are sharing things with people that you are friends with on Facebook and their friends. So when you put things out there, those people can see them and vice versa. So that when you get things, there is a social connection. Now, one of the tension points and something we're working through, our members are demanding to see— you know, the idea is to see more things. So the average person who joins on Yertle right now has access to 340 items that collectively their friends and friends of friends have posted or given away. But there's actually a need for more. And so as we start to go beyond, right, and we start to open that up, that you don't just see— because if I join and I've only got a few Facebook friends on Yertle, or my friends don't have a lot of friends, you want to see more items. And while people say, one of the things we hear a lot is, "I want to share things with my band, my guitarist and my drummer and my bass player, but yet I want an infinitely large collection of drums." Right? It's like that doesn't— it doesn't work together. But we do believe that there is a way with real identity to share things in different orders to get social benefit from people that you know and then figure out ways to, with real identity, to go beyond there and have access to more items when they don't exist in the circle of people that you are close with, or when you're looking for something that doesn't exist in that circle. But in both cases, for us, real identity is a central— it's either getting— it's knowing your friends or getting to know someone and having that trust.

Hmm. Andre at eBay, my screen name, so to speak, has nothing to do with anything personal and I've got a deep and well sort of documented score, but it's certainly not my real identity in a traditional sense. It's my highly reputation-defended internet identity. So do you agree with this point of real identity?

I do, but I think there's a few, a couple of nuances that I would just add, if I may. I think for a new marketplace, well, first of all, eBay started in 1995, as you reminded us all, and at that point in time, I think the web was different than what it is today. And when I think about the sort of identity at that time, it was primarily people that you didn't know, and people wanted to hide their identity for privacy, be very strong privacy DNA in the web in its early days. And what people did on eBay is they started to, you know, use that identity and build their brand on their identity and build their feedback on their identity and sort of in a way build reputation on this, you know, unknown identity and therefore try to fill fulfill the role of real identity through that, but it was transactional identity rather than personal identity. What's interesting though is if you're an entrepreneur and building a marketplace business, you know, today I think real identity really is critical, especially when you're starting. I think over time what we're finding is that— what I found at eBay and now we're starting to find at Reader Rights is the brand of the marketplace itself becomes so powerful that people start trusting the actual marketplace. And they start trusting the brand. And they don't really— the identity of the actual seller or the renter or the owner or the host becomes less important over time. So critical at the beginning, I think, to remove some of that friction around trust. But over time, I think, becomes less important as the brand of the marketplace becomes very strong and very credible on its own.

Thank you. We have some questions from the audience. Thank you, guys. These are good. This is a rich discussion, and I think it could go for 10 hours. So I'm going to cherry-pick the ones that I think add to the group here. For Ronnie, are there services where collaborative consumption won't work? Financial services, for example? And what I'll maybe add to that question from my— is from my own curiosity is as the collaborative consumption industry has grown, there are two big ones that stand out to me, and that's real estate and transportation. But what about all the others? What about legal? What about education? What about all the— all the ones that I mentioned. And so how do you see that?

Yeah, so finance is actually a really interesting one. Highly debated in the firm, financial ones, actually. So I think Kickstarter is a good first version of financial collaborative consumption. And I think it shows that people have, like, a very healthy appetite for more financial collaborative consumption, but I don't think we've come anywhere close to developing the kinds of products that you're going to need in order to have like financial services at scale in this space. But I do think that— I am of the belief that over time I think there will be products that are built, you know, on these transparent platforms that will give you the ability to do things things like help out your neighbor refinance his home or do some pretty heavily complicated financial services tasks that only banks can do right now because they're the only people with access to capital and the access to get information about you and then to crunch all of these things. But I mean, imagine a world where you have those middle parts available to you and then you can go around to your friends and then your friends of friends and gather up capital that way, from anything from a home to a new business. So I do think that over time financial services in this space will take hold, but it's very early, and I've yet to see a product that even comes close to doing something this complicated yet. And again, Kickstarter is just a phenomenal, phenomenal success, and it shows that there is an appetite for doing things like this from the general public. Thank you.

This is a question for you, Andy, and also for you, Andre, potentially. For product sharing, there's a lag time between needing the product and accessing the product. And is that an issue for your business model? And for somebody like a car sharing— I'm sorry, a car sharing company where BMW is managing all the inventory, they can scale it up as the demand scales up on the supply side. But if you need the supply side and the demand side to grow independently, how do you make sure the experience is competitive with ownership just from a convenience standpoint?

In answering that, one of the early experiences that I had as we were starting Yertle was around my daughter— my daughter was going to play soccer. And of course she needed, you know, uniforms, shin guards, etc. And so we ended up buying the shin guards on Amazon. So I clicked a button, I hit the button, it came to my door 48 hours later. It's magic. I love that company. But as it did it, I mean, I've worked, right? I mean, I've run Dairan's strategy for distribution for Walmart. I understand the complexity involved in that happening, right? It's been built up over years. And the fact that those shin guards were sourced halfway around the world and made it to my— they came from a warehouse 450 miles away. And they made it there in 48 hours. Yet the shin guards that we needed existed multiple places in my neighborhood, probably on my block. Right? In the age that we are living in and moving into, we will be able to get the things that we need faster with the information and the inventory of what's actually there. And it's just that the models that we're used to right now have been built up over years that make them look like magic right now, that have started slowly and they've been built up. But I think for a majority of— and it's not going to be for every item. I mean, you're not going to— we tell people not to yurtle toothbrushes. There are things you just don't want to yurtle. But there are things that you do, and for those, I mean, shin guards are a great example. You use them for one year, and then most people have 2 to 3 pair of shin guards if they've got a daughter that's in 5th or 6th grade that are sitting in the garage. And the person wants to move them out of the garage, ideally, to hand them to somebody that they can— they either get to know or they exchange some social capital where, you know, as they get shin guards from, you know, from Peter and I say, "Gosh, my daughter is loving them. We love soccer." It's a connection. So it's a beautiful thing. So I think that we will actually, as we move forward, we will see a shorter time to be able to find the things that we need because they're coming from— they're coming more locally. They exist right next door.

Can I offer a question and a challenge? So in the future, yes. But how do we get to that future in the sense that if I can't get my shin guards from my neighbor now, then why would I use your service over somebody, over Amazon?

So Yertle is nowhere close to overtaking Amazon at the moment.

We have work to do.

The first use case that we're really building into is one where people have items— and most of us, I won't say we all, because there's someone who will find me later that says I have nothing of excess. But most of us have— 80% of the items in our home are used less than once a month. And so the use case that we're moving on right now is that when you want to put something on the curb, we have a better way to move that item out. And as you have access to those items, what we're finding is you end up in the community, people end up finding those items and really wanting them. So I just got, if any of you remember from the '70s, the Othello board game. It was that board game with the chips you used to flip over. And, you know, Pam Marcus had posted this Othello board game and I nabbed it on Yertle. I wasn't shopping for an Othello board game, but I'm always looking for things to do. And so it was a— I didn't need it that moment. She ended up— we ended up meeting up about a week later. I got the game. And every time I see the game, I think about Pam. And it's kind of amazing that for our relationship, for an $8 game, I think about Pam as we play the Othello game. And so it wasn't the case where I think, I've got to get an Othello game, so I'm going to use Yertle. It was a case where I say, gosh, I remember that game. I used to love that game. My kids would like to play that game. And Pam was generous enough to give it to us, and I appreciate the relationship with her more.

How do you reconcile what all three of them have described in varying ways, which is the uniqueness and the serendipity and the magic of the network with a fleet of the exact same car that you're car-sharing? Is that a concern of yours, or do you guys think you win on inventory? How do you manage that?

Yeah, I mean, the future vision isn't just a fleet of the same vehicle. The idea is to give people flexibility to have— to be able to choose an X1 should you want to drive to Tahoe for the weekend, or a Mini Cooper convertible if you'd like to drive on Highway 1 for 200 miles or some distance that exceeds— These aren't bad options. Not bad options so far. The distance that the Acty can travel on a on a single charge. But I did want to mention the, you know, just kind of the future vision and where we are now, which I think is important. The future vision is that when you buy a car, you get in that car— should I?

No, I'm wondering how many more. 3 more?

Oh, okay. I thought it had to do with me.

It's like catcher signals. I'm giving him a hint behind 3 seconds.

You're coming, I gotta get by. Thank you, appreciate it. The future is you buy a car and you get in and it says when you first turn it on, do you want this car to be shareable? And you say yes or no. And then later on you can choose your peer-to-peer car sharing partner for that. Maybe it's RelayRides. And then you can imagine somebody else wants to use your car, has found it on the RelayRides platform, goes up to it, and through our telematics and the RelayRides backend, we're able to unlock the car. And while that car is unlocking, it says it's Andy's reservation. It says Andy Rubin is getting into the this car right now and the seat goes into the right position and the armrests and everything go into the right place and the radio stations are all your favorites. You could imagine that scenario. Now, where are we now? That's a very different story. Right now, if you want to unlock or lock the BMW, you hit a button, it— you basically communicates with our backend servers in Munich. The servers send an SMS over a secure connection to the vehicle. The vehicle wakes up, says, "Okay, what do you want?" Please unlock. And that process can take up to 2 or 3 minutes. So that's completely unreasonable for a service that we want to be convenient, to be flexible, and to really be premium.

Sounds like you're running a startup within a big company on some level there. That's definitely true. Cool. Very cool. So we have— we have 2 more minutes, so I'm gonna leave with one question, and I'd love for you guys all to take a stab at it however briefly as you'd like, and I would like to too, frankly, is what are you most excited about about collaborative consumption? What really what really makes it tick for you in particular, given your experiences?

I personally, it's really the economic empowerment that it creates for people. I get just very, very excited when I meet— we have regular community meetings with our members and the owners in particular, you know, who have, you know, sort of, I think, a deeper relationship with with the marketplace because they sometimes actually know our product better than we do, frankly. They understand our policies and all the details better than we do. And our owners are very passionate about RelayRides. And the reason they're passionate is that they realize that thanks to, you know, this new idea, this new marketplace, they can actually keep their car or they can start a new business. It's really fun. I mean, it's just very rewarding to be connected so humanly to our customers and to understand the impact that we're having to their lives. And I think that's the, by far for me, the highest satisfaction in being part of a marketplace/collaborative consumption business.

Yeah. I tend to agree. Like, the financial impact of this and then giving people the ability to do what they are best at is just like a tremendous opportunity to me. So whether it's keeping somebody in their car or keeping somebody in their home or, you know, there's another company that we just looked at where it's enabling people to be tour guides, right? So if somebody has a a particular passion for a certain area. It's linking up, linking up people that have a need for knowledge with the most knowledgeable people in that area. And the ability to do that in an efficient manner is like, I think, something that we've never really had an opportunity to do before. And so capitalizing on all of those models and being able to like foster all these different models through these new platforms is just like a tremendous opportunity. And like frankly, I don't even know —like where this goes, but it's like in a—it's in a very, very good direction. It's headed in a very good direction.

I think that's really well said. So it's—I mean, clearly economic value that is being unlocked is hard to really—it's hard to grok, right? So just across the different spaces and services, the part that goes beyond there, though, is what's being created, right? So not just saving money or finding a more efficient way of doing it. It's the connection between people, the communities that are being created, the trust that's being created at a larger scale. And those experiences and those relationships are what continues to blow me away.

I guess what sort of gets me jazzed about collaborative consumption as it relates to BMW is the idea that the double bottom line, or maybe it's a triple or quadruple bottom line. So you are really saving the environment. You're reducing parking congestion, reducing CO2 emissions and other pollutants. And you might have an impact on water and other things as well. While at the same time offering people flexible choices about mobility, affordable mobility, sustainable mobility, and then just, I believe the opportunity is there to make a tremendous amount of money selling a car 9 times. I think that sounds like a great idea. And much more civilized than just selling it a single time.

I think we can end on that No, this panel's been amazing. Thank you guys so much. That's all we've got.